June 16, 2009
June 6, 2009
Mrs. Elizabeth Murphy
Secretary, Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549-1090
Ref. File No: S7-08-09
Dear Mrs. Murphy,
I respectfully request that the SEC not reinstate the Uptick Rule.
The main problem that I have with the Uptick Rule, or any additional short sale restrictions, is that it creates an unfair marketplace.
The market has to be as fair as possible on both the buy and sell side. It's the battle between the two that is price discovery. Short sale restrictions give the market a long bias, which will lead to over-valuations in the long term, further inflating bubbles and creating latent volatility.
The Uptick Rule is also fundamentally unfair because it serves to benefit larger Wall Street firms at the expense of smaller investors. This is the case because the restrictions do not apply to market makers. So if you are noticing firms with market making activity supporting the reinstatement of this rule, it's merely because it will mean greater profits for them.
Personally I feel that the only reason there is a call to reinstate the Uptick Rule is because over the last 18 months more people lost money in the stock market than made money. In making your decision, I strongly urge you to maintain a long term focus on what is best for the domestic and global equity markets. Restricting the actions of those who speculate something is overvalued in an attempt to restore confidence to those who blindly follow a trend seems wildly irresponsible.
For these and many other reasons, it would be a serious mistake to reinstate the Uptick Rule. Thank you so much for your time.
Sincerely,
Michael Manzione